Lab 04 — Perform a Third-Party Security Assessment

Lab Overview

Welcome to Lab 04 of the Enterprise Governance, Risk & Compliance (GRC) module.

In this lab, you’ll take on the role of a Cloud Security Engineer at CloudNova Technologies.

The organization is preparing to onboard a new Software-as-a-Service (SaaS) provider that will process sensitive customer information and integrate directly with the company’s AWS cloud environment.

Before any contract is signed, the Governance, Risk & Compliance (GRC) team requires a comprehensive Third-Party Security Assessment.

Your responsibility is to evaluate the vendor’s security posture, compliance certifications, governance practices, cloud security controls, and operational maturity to determine whether the organization should approve, reject, or approve the vendor with specific risk mitigation requirements.

This lab reflects the real-world work performed by Cloud Security Engineers, Vendor Risk Analysts, Security Consultants, GRC Analysts, Compliance Officers, Security Architects, and CISOs.

Lab Information

Item	Details
Lab Name	Perform a Third-Party Security Assessment
Difficulty	Intermediate
Estimated Time	2–3 Hours
Lab Type	Governance, Risk & Compliance (GRC)
Environment	Documentation, AWS Reference Environment
Skills	Vendor Risk Assessment, Third-Party Risk Management, Compliance, Governance

Learning Objectives

By completing this lab, you will learn how to:

Perform a third-party security assessment.
Evaluate vendor security controls.
Review compliance certifications.
Assess cloud security practices.
Evaluate identity and access management.
Identify supply chain risks.
Build a Vendor Risk Assessment Report.
Recommend vendor approval decisions.

Business Scenario

CloudNova Technologies plans to integrate a new SaaS platform that provides customer relationship management (CRM) services.

The vendor will have access to:

Customer Information
Business Reports
Employee Accounts
Cloud APIs
Authentication Services

Because the platform will process sensitive business information, executive leadership requires a formal security assessment before onboarding.

You have been assigned to evaluate the vendor and provide a recommendation.

Vendor Profile

The vendor provides:

SaaS CRM Platform
REST APIs
Single Sign-On (SSO)
Cloud Storage
Customer Analytics
Mobile Application

The vendor hosts its services in AWS and serves enterprise customers worldwide.

Lab Objectives

Your assessment should answer:

Is the vendor trustworthy?
Are appropriate security controls implemented?
Does the vendor meet compliance requirements?
What business risks exist?
What contractual protections are required?
Should the vendor be approved?

Task 1 — Identify Business Requirements

Understand why the vendor is being onboarded.

Document:

Business Function
Data Processed
Critical Services
Integration Points
Business Owner

Determine the importance of the vendor to business operations.

Task 2 — Classify Vendor Risk

Determine the vendor’s business criticality.

Example:

Vendor Type	Risk Level
Payment Gateway	Critical
Identity Provider	Critical
CRM Platform	High
Email Provider	High
Office Supplies	Low

Record the overall vendor classification.

Task 3 — Review Governance Documentation

Review the vendor’s governance documentation.

Examples include:

Information Security Policy
Privacy Policy
Risk Management Policy
Incident Response Plan
Business Continuity Plan
Disaster Recovery Plan
Vendor Management Policy

Identify any missing documentation.

Task 4 — Review Compliance Certifications

Verify compliance certifications.

Examples:

ISO/IEC 27001
SOC 2 Type II
PCI DSS
GDPR
HIPAA
CSA STAR
Cyber Essentials

Document:

Certification Status
Expiration Date
Scope
Audit Organization

Task 5 — Assess Identity & Access Management

Review identity security controls.

Evaluate:

Multi-Factor Authentication
Single Sign-On
Role-Based Access Control
Least Privilege
Privileged Access Management
Password Policy
User Provisioning
Access Reviews

Identify weaknesses.

Task 6 — Assess Cloud Security

Review cloud security controls.

Examples:

Encryption at Rest
Encryption in Transit
Logging
Monitoring
Backup Strategy
Disaster Recovery
Multi-Region Deployment
Security Monitoring

Assess whether controls meet enterprise expectations.

Task 7 — Review Operational Security

Evaluate:

Vulnerability Management
Patch Management
Security Monitoring
Incident Response
Threat Detection
Security Awareness Training
Secure SDLC
Change Management

Document observations.

Task 8 — Assess Supply Chain Security

Review:

Software Dependencies
Open-Source Libraries
Third-Party APIs
Container Security
CI/CD Security
Code Signing
Software Update Process

Evaluate software supply chain maturity.

Task 9 — Review Contracts & Legal Requirements

Review security-related contractual clauses.

Confirm:

Data Protection
Confidentiality
Right to Audit
Security Incident Notification
Service Level Agreements (SLAs)
Business Continuity Requirements
Compliance Responsibilities
Contract Termination Conditions

Document missing protections.

Task 10 — Build a Vendor Risk Assessment Report

Prepare a professional assessment report.

Include:

Executive Summary
Vendor Overview
Scope
Risk Rating
Security Strengths
Security Weaknesses
Compliance Status
Business Risks
Recommendations
Approval Decision

Conclude with one of the following:

Approve
Approve with Conditions
Reject

Provide justification for your recommendation.

Deliverables

By the end of this lab, produce:

Vendor Profile
Vendor Classification
Governance Review
Compliance Review
IAM Assessment
Cloud Security Assessment
Operational Security Review
Supply Chain Assessment
Vendor Risk Assessment Report
Executive Recommendation

Expected Outcome

Upon successful completion of this lab, you will have:

Performed a comprehensive vendor security assessment.
Evaluated governance and compliance maturity.
Reviewed cloud security controls.
Identified operational and supply chain risks.
Produced an executive-ready Vendor Risk Assessment Report.
Recommended an evidence-based onboarding decision.

This mirrors the responsibilities of Cloud Security Engineers, Vendor Risk Analysts, GRC Consultants, Security Architects, Compliance Officers, Procurement Security Teams, and CISOs.

Best Practices

While conducting the assessment:

Verify evidence rather than relying on vendor claims.
Review independent audit reports where available.
Focus on business impact.
Assess critical integrations.
Document objective findings.
Prioritize high-risk issues.
Assign remediation actions.
Maintain audit-ready documentation.

A vendor should never be approved solely because of reputation—approval should be based on objective evidence.

Lab Summary

Congratulations!

You have successfully completed a Third-Party Security Assessment.

You now understand how enterprise organizations evaluate vendors, assess cloud security controls, review compliance certifications, analyze supply chain risks, and make informed onboarding decisions based on governance, risk, and compliance principles.

This experience closely reflects real-world vendor risk assessments performed by Cloud Security Engineers, Security Consultants, Vendor Risk Analysts, GRC Professionals, Compliance Officers, Procurement Security Teams, and Security Architects.

Next Lab

➡️ Lab 05 — Build an Enterprise GRC Dashboard

In the final lab of this module, you’ll design an executive-level Governance, Risk & Compliance (GRC) dashboard that visualizes security KPIs, KRIs, compliance status, audit findings, enterprise risks, and executive metrics to support informed business decision-making.